Even though we’ve seen one of the worst economic crises in recent history and the housing bubble burst, homes are still the bulk asset in many people’s wealth. But, did you know that as you move beyond your formative years, you can use your house to cash in and finance your retirement? Here are some tips and tricks to cashing in on your home.
Get a Home-Equity Loan
It isn’t always a good idea to pull money out of your home for basic living expenses. But, if you can definitely repay the loan, why not go ahead and consider it? One way to effectively use a home-equity loan would be to remodel your home, perhaps making it more senior-friendly.
Consider a Reverse Mortgage
A reverse mortgage will allow you use the equity in your home and stay there as long as you can continue paying property taxes, insurance premiums, and maintenance costs. Though these mortgages do get a lot of criticism, they can be a good choice for many people hoping not to move out of their current home.
Rent Out a Room
A quick way to cash in on your home without selling it is to actually rent out a room. Yes, this means that someone will need to move in, but a little legwork, background checks, and personal references will allow you to find the right person. This setup will allow you to earn extra money for doing very little.
Cut Down on Expenses
This might actually mean you need to move from your current home to a smaller one. Consider moving to another state if it means your dollar may be stretched further when it comes to housing expenses. Try not to get bogged down in the memories and emotional attachments that you might have.
Look into Tax Breaks and Credits
Did you know that the interest payments on your house are tax deductible? Yes – you can deduct the interest you’ve paid on your home equity loans, also! If you have put an effort into making your home more energy efficient, some energy tax credits may also be applied. Check those out with your local tax professional or the IRS’ site.
We want you to keep in mind that this is not an exhaustive list of all the ways you might be able to cash in on your home. And remember, you may find that some of these suggestions simply won’t work for you. It just comes down to what will work best for you and your home situation.